(1) in interest-bearing securities of the United States or securities guaranteed as to both principal and interest by the United States; or

(2) in bonds or other obligations which are lawful investments for fiduciary, trust, and public funds of the United States.

PAYMENT TO SUPPLEMENTAL RESERVE FUND

SEC. 306. An agreement pursuant to this title shall provide for payment into the supplemental reserve fund established with respect to an issue of obligations of all sums collected for such purpose pursuant to section 309 (d) (2).

USE OF SUPPLEMENTAL AND BASIC RESERVE FUNDS

SEC. 307. The agreement pursuant to this title shall provide that if, after payment of the other expenses specified in section 309 (d) (3) with respect to any school facilities, the payments for the use of such facilities and other funds available for the purpose for any year are insufficient to meet the annual debt service for such year on any issue of obligations

(a) the State school financing agency shall use the sums, if any, in the supplemental reserve fund established for such issue for meeting such debt service;

(b) if such sums are insuflicient for this purpose, such agency shall use the sums available in the basic reserve fund established for such issue;

(c) withdrawals from the basic reserve fund for this purpose shall be equally divided between the State account and the Federal account in the fund, to the extent the balance in the State account is adequate therefor; and (d) if such balance is not adequate, the amount of any remaining deficiency shall be withdrawn from the Federal account to the extent of any balance therein, except that the total of the withdrawals from such account with respect to such debt service may not exceed one-half of such debt service.

REPAYMENTS OF ADVANCES

SEC. 308. (a) An agreement under this title with respect to any issue of obligations shall provide that if, at the end of any year, the aggregate of the sums in the basic and supplemental reserve funds, including interest or other increments from the investment thereof, exceeds two times the maximum annual debt service on such issue for any of the ensuing years, the State school-financing agency shall pay to the Commissioner, first (and until all advances made by the Commissioner, subsequent to the original advance made by him, together with interest or other increment received from the investment of such advances, have been repaid), an amount which bears the same ratio to the amount of such excess as the sum of such subsequent advances bears to the sum of such advances plus the sum of any payments made by the State to the State account in the basic reserve fund in addition to the original amount of such State account; and second (and until all advances made by the Commissioner, together with interest or other increment received from the investment of such advances, have been repaid), an amount which bears the same ratio to the amount of such excess as the sum of all advances made by the Commissioner bears to such sum plus the sunn of all payments made to the State account.

(b) Whenever any portion of an excess is repaid to the Commissioner under subsection (a), the remainder, if any, of such excess shall be paid to the State or left in the basic or supplemental reserve, or shall be disposed of in such other manner as may be provided, at the request of the State school-financing agency, by or pursuant to the agreement.

(e) Amounts paid to the Commissioner under subsection (a) shall be used to redeem any outstanding obligations of the Commissioner issued pursuant to section 312 and any excess shall be deposited in the Treasury of the United States as miscellaneous receipts.

ADDITIONAL CONDITIONS OF AGREEMENT

SEC. 309. In addition to the foregoing provisions and such other provisions as may be necessary to protect the financial interest of the United States, each agreement entered into by the Commissioner with respect to any one or more issues of obligations of a State school-financing agency shall provide

(a) that (1) all such obligations in any issue shall mature in not more than thirty-two years from the earliest date of any of such obligations in such issue and the first payment of principal shall become due not later

than the end of the third year following such earliest date, and (2) the proceeds of the sale of such obligations shall be used to finance the cost (including interest prior to, during, and for such period not exceeding one year after completion of construction as may be provided in the agreement. and other necessary carrying charges) of construction of school facilities by the State school-financing agency or the local educational agencies, for use by local educational agencies requesting such facilities;

(b) that such school facilities shall be limited to those certified by the State educational agency to be needed for current or reasonably anticipated enrollments and to be consistent with any applicable State redistricting plans or policies, and that construction thereof will be in accord with applicable State laws and standards;

(c) that such school facilities, upon completion of construction, shall (1) be available for use by the local educational agency for the school district in which the school facilities are located, (2) if the State so desires, be conveyed to such local educational agency upon the making of adequate provi sion for repayment of advances made by the Commissioner with respect to the issue of obligations and for retirement of such issue or an agreed-upon portion thereof, as provided in the agreement; and

(d) that the payments for the use of such facilities shall be fixed, charged, and collected in amounts which will in the aggregate, together with other sums available for the purpose, provide sufficient funds to pay, to the extent payment is not otherwise provided for, (1) the annual debt service on the issue of obligations, and (2) in each year until the latest maturity date of such issue of obligations, for deposit in the supplemental reserve fund, an amount equal to one-fourth of 1 per centum of the original principal amount of such issue of obligations, and (3) the cost of the maintenance, repair, re placement, and insurance of such facilities, and administrative and other expenses of the State school-financing agency in connection with such facilities or the financing thereof.

AUTHORIZATION OF APPROPRIATIONS

SEC. 310. There are hereby authorized to be appropriated for the fiscal year beginning July 1, 1958, and the next four fiscal years, such sums, not to exceed an aggregate of $150,000,000, as may be necessary to provide the initial Federal advances authorized by this title to be made to basic reserve funds.

PERIOD DURING WHICH OBLIGATIONS ISSUED

SEC. 311. Federal advances may be made pursuant to this title only with respect to obligations issued in the period beginning July 1, 1958, and ending June 30, 1963.

OBLIGATIONS ISSUED BY COMMISSIONER

SEC. 312. (a) To obtain funds for additional advances under section 305 (b), the Commissioner shall issue notes, debentures, or other obligations for purchase by the Secretary of the Treasury. The total amount of such obligations which may be outstanding at any one time shall not exceed $10,000,000; and the total amount of such obligations issued in any year may not exceed the aggregate amount needed for such additional advances for such year.

(b) Obligations issued by the Commissioner under this section shall be in such forms and denominations, have such maturities, and be subject to such terms and conditions as may be prescribed by the Commissioner, with the approval of the Secretary of the Treasury. Such obligations shall bear interest at a rate determined by the Secretary of the Treasury after taking into consideration the current average market yields of outstanding marketable obligations of the United States having comparable maturities. The Secretary of the Treasury is authorized and directed to purchase any obligations of the Commissioner issued under this section and for such purpose is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any purchases of the Commissioner's obligations hereunder. There are hereby authorized to be sp propriated not to exceed $10,000,000 for payments on the principal amount plus an additional amount to pay such interest as may be due, together with repayments made by State school-financing agencies hereunder, for payments on obligations issued by the Commissioner under this section.

ADMINISTRATIVE PROVISIONS

SEC. 313. (a) The Commissioner, in addition to other powers conferred by this Act, shall have power to agree to modifications of agreements made under this title and to pay, compromise, waive, or release any right, title, claim, lien or demand, however arising or acquired under this title; except that ntohing in this subsection shall be construed to affect the power of the Attorney General in the conduct of litigation arising under this Act.

(b) Financial transactions of the Commissioner in making advances pursuant to this title, and vouchers approved by the Commissioner in connection with such financial transactions, shall be final and conclusive upon all officers of the Government; except that all such transactions shall be subject to audit by the General Accounting Office at such times and in such manner as the Comptroller General may by regulation prescribe.

SUITS AGAINST THE UNITED STATES

SEC. 314. Any State school-financing agency with which the Commissioner has made an agreement under this title, or any holder of obligations with respect to which a reserve fund has been established under this title, may bring suit against the United States to enforce any duty of the Commissioner under this title or any undertaking of the Commissioner under an agreement under this title. In any action arising under this title to which the United States is a party, the district courts of the United States shall have jurisdiction, without regard to the amounts involved. Such action shall be brought in the district court of the United States for the judicial district in which the plaintiff, or any of the plaintiffs if there are more than one, resides, or has his principal place of business or, if he does not have his prinicpal place of business within any such judicial district, in the District Court of the United States for the District of Columbia.

TAX EXEMPT STATUS OF OBLIGATIONS

SEC. 315. Obligations of any State school-financing agency, including interest thereon, with respect to which advances are made pursuant to this title, and income of such agency in connection with the school facilities financed by such obligations, shall be exempt from all taxes (other than estate, inheritance, and gift taxes) now or hereafter imposed by the United States.

TITLE IV-GENERAL PROVISIONS

DEFINITIONS

SEC. 401. For purposes of this Act

(a) The term "Commissioner" means the (United States) Commissioner of Education.

(b) The term "State" means a State, Alaska, Hawaii, Puerto Rico, Guam, or the Virgin Islands, except that for purposes of title I it also includes the District of Columbia and American Samoa.

(c) The term "State educational agency" means the State board of education or other agency or officer primarily responsible for the State supervision of public elementary and secondary schools, or, if there is no such officer or agency, an officer or agency designated by the governor or by State law.

(d) The term “State school-financing agency" means the single agency, official, governmental entity, or instrumentality of a State, designated or established by the State for purposes of title III.

(e) The term "local educational agency" means a board of education or other legally constituted local school authority having administrative control and direction of free public education in a city, county, township, school district, or political subdivision in a State; and includes any State agency which directly operates and maintains public schools. If a separate public authority, other than a State school-financing agency, has responsibility for the provision or maintenance of school facilities for any local educational agency or the financing of the construction thereof, such term includes such other authority.

(f) The term "school facilities", except as otherwise provided in this paragraph, means classrooms and related facilities (including initial equipment, machinery, and utilities necessary or appropriate for school purposes), for education which is provided as elementary or secondary education, in the applicable State, at public expense and under public supervision and direction; and

interests in land (including site, grading, and improvement) on which such facilities are constructed. Such term does not include athletic stadiums, or other structures or facilities, intended primarily for events, such as athletic exhibitions, contests, or games, for which admission is to be charged to the general public. For purposes of title I, such term does not include interests in land, off-site improvements, or structures or facilities designed to be used exclusively for special activities, such as single-purpose auditoriums and gymnasiums.

(g) The terms "constructing" and "construction" mean the preparation of drawings and specifications for school facilities; erecting, building, acquiring. altering, remodeling, improving, or extending school facilities; and the inspection and supervision of the construction of school facilities.

(h) The term "annual debt service" means the aggregate amount required to pay the interest on and principal of each issue of obligations becoming due in each successive twelve-month period designated in accordance with the agree ment under title III.

(i) The term "school-age population" means that part of the population which is between the ages of five and seventeen, both inclusive, and such school-age population for the several States shall be determined by the Commissioner on the basis of the population between such ages for the most recent year for which satisfactory data are available from the Department of Commerce.

SEC. 402.

UTILIZATION OF OTHER AGENCIES

In administering the provisions of this Act, the Commissioner is authorized to utilize the services and facilities of any agency of the Federal Government and, without regard to section 3709, as amended, of the Revised Statutes, of any other public or nonprofit agency or institution, in accordance with agreements between the Secretary of Health, Education, and Welfare and the head thereof. Payment for such services and facilities shall be made in advance or by way of reimbursement, as may be agreed upon by the Secre tary and the head of the agency or institution concerned.

APPROPRIATION FOR ADMINISTRATION

SEC. 403. There are hereby authorized to be appropriated for each fiscal year to the Department of Health, Education, and Welfare such sums as may be necessary for administration of this Act.

DELEGATION OF FUNCTIONS

SEC. 404. The Commissioner may delegate to any officer or employee of the Office of Education any of his functions under this Act except the making of regulations.

ASSURANCE AGAINST FEDERAL INTERFERENCE IN SCHOOLS

SEC. 405. In the administration of this Act, no department, agency, officer, or employee of the United States shall exercise any direction, supervision, or control over the personnel, curriculum, or program of instruction of any school or school system.

[S. 3311, 85th Cong., 2d sess.]

A BILL To authorize assistance to States and local communities in remedying the inadequacies in the number of their teachers and teachers' salaries and the shortage in classrooms

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SHORT TITLE

SECTION 1. This Act may be cited as the "School Assistance Act of 1958".

FINDINGS AND PURPOSE OF ACT

SEC. 2. The Congress finds that despite sustained and vigorous efforts by the States and local communities, which have increased current school construction to an unprecedented level, and have likewise increased expenditures for teach

ers' salaries, there is still a serious national shortage of classrooms and of teachers requiring emergency action on the part of the Federal Government. The limited financial resources available to many communities are not adequate to support construction programs of sufficient size to eliminate their classroom shortages, and practically all communities are faced with the problem of providing reasonable compensation to their growing numbers of teachers. While the Congress recognizes that responsibility for providing adequate school facilities and teaching staff lies primarily with the States and local communities, the national interest requires that the Federal Government assist State and local governments in solving these pressing problems. It is the purpose of this Act to provide Federal financial assistance on a grant basis to help meet the problems of inadequate facilities and inadequate teachers' salaries.

AUTHORIZATION OF APPROPRIATIONS

SEC. 3. There are hereby authorized to be appropriated for the fiscal year beginning July 1, 1958, and for succeeding fiscal years, amounts equal to the product of the estimated number of the school-age population of all the States as of such year and the following amounts: For the fiscal year beginning July 1, 1958, $25; for the fiscal year beginning July 1, 1950, $50; for the fiscal year beginning July 1, 1960, $75; and for each fiscal year thereafter, $100.

ALLOTMENTS TO STATES

SEC. 4. (a) The Commissioner shall allot for each fiscal year to each State making certifications pursuant to section 6 and having plans approved pursuant to section 7, from the total amount appropriated for such year pursuant to section 3, an amount which bears the same ratio to such total of such State's estimated school-age population bears to the total estimated school-age population of all such States, subject only to such adjustments, if any, as result from the application of section 5.

(b) Each State allotment may be divided in two portions. One portion, hereinafter called the school construction and basic instructional equipment allotment, shall be the amount the State education agency shall request and certify to the Commissioner for grants under section 7. The remaining portion, hereinafter, called the teacher salary allotment, shall be for grants under section 6.

MAINTENANCE OF STATE AND LOCAL SUPPORT FOR SCHOOL FINANCING

SEC. 5. (a) The amount allotted to any State under section 4 for any year shall be reduced by the percentage (if any) by which its State school effort index for such year is less than the national school effort index for such year. The total of such reductions shall be reallotted among the remaining States by proportionately increasing the amounts allotted to them under such section for such year. (b) For purposes of subsection (a)—

(1) the "State school effort index” for any State for a fiscal year is the quotient obtained by dividing (A) the State's school expenditures per public-school child by (B) the income per child of school age for the State; except that the State school effort index shall be deemed to be equal to the national school effort index in the case of (i) Alaska, Hawaii, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the District of Columbia, and (ii) any State for which the school expenditures per public-school child are not less than the school expenditures per public-school child for the continental United States;

(2) the "National school effort index" for any fiscal year is the quotient obtained by dividing (A) the school expenditures per public-school child for the continental United States by (B) the income per child of school age for the continental United States.

(c) (1) The school expenditures per public-school child for any State for purposes of determining its State school effort index for any fiscal year means the quotient obtained by dividing (A) the total expenditures by the State and subdivisions thereof for elementary and secondary education made from current revenue receipts derived from State and local sources in the State, as determined by the Commissioner on the basis of data for the most recent school year for which satisfactory data for the several States are available to him, by (B) the number of children in average daily attendance in public elementary and secondary schools in such State, as determined by the Commissioner for such most recent school year.

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